Tuatis v.

Spouses Escol, 604 SCRA 471 (2009)

DOCTRINE:

SUMMARY: Tuatis filed a Complaint for Specific Performance with

Damages against herein respondent Visminda Escol (Visminda). Tuatis
alleged in her Complaint that sometime in November 1989, Visminda,
SELLER, and Tuatis, BUYER, entered into a Deed of Sale of a Part of a
Registered Land by Installment  (Deed of Sale by Installment). Despite
repeated verbal demands, Tuatis failed to comply with the conditions
that she and Visminda agreed upon in the Deed of  Sale by
Installment  for the payment of the balance of the purchase price for the
subject property. Visminda asked the court to dismiss Tuatis' Complaint,
or in the alternative, order Tuatis to return the subject property to
Visminda after Visminda's reimbursement of the P4,000.00 she had
received from Tuatis. SC held that there is breach of the contract of sale
on installment entered between the parties. The SELLER cannot be
compelled to execute the Deed of Conveyance to the BUYER since the
SELLER  is still the absolute owner of the property and she is not
indemnified of the exact payment from the BUYER.

FACTS:
 Visminda Escol, (the seller) and Ophelia Tuatis, the buyer entered
into a Deed of Sale by Installments, the subject matter of which is
a parcel of land in Sindangan.
 It provided that upon the failure of the buyer to pay the remaining
balance within the time stipulated, he shall return the land to the
seller, and the seller shall return all the amounts paid by the buyer.
 Tuatis took possession of the land and constructed a residential
building.
 TUATIES ASSERTED:
she paid Visminda the remaining balance of P3000 in the
presence of one Erik Selda and thereafter requested Visminda to
sign the absolute deed of sale. Visminda refused contending that
the purchase price has not been fully paid.
 RTC DISMISSED TUATIS COMPLAINT and ruled
  that Tuatis constructed the building in bad faith for she had
knowledge of the fact that Visminda is still the absolute
owner of the land and there was also bad faith on the part of
Visminda since she allowed the construction of the building
without opposition on her part.
 The rights of the parties must, therefore, be determined as if
they both had acted in bad faith.
 Their rights in such cases are governed by Article 448 of
the Civil Code.
 APPEALED IN CA DISMISSED
which resulted to the finality of the appealed decision. Visminda
filed a writ of execution. Tuatis then moved that the RTC issue an
order allowing her to buy the subject property and maintained that
she has the right

ISSUE:

Whether or not Tuatis is entitled to exercise the options granted in

Art. 448 of the Civil Code.

RULING:
 No,
 Tuatis is not entitled to exercise the options granted in Article 448
of the Civil Code. Article 448 provides that the owner of the land on
which anything has been built, sown or planted in good faith, shall
have the right to appropriate as his own the works, sowing or
planting, after payment of the indemnity provided for in Articles 546
and 548, or to oblige the one who built or planted to pay the price
of the land, and the one who sowed, the proper rent.
 However, the builder or planter cannot be obliged to buy the land if
its value is considerably more than that of the building or trees.
 In such case, he shall pay reasonable rent, if the owner of the
land does not choose to appropriate the building or trees after
proper indemnity. The parties shall agree upon the terms of the
lease and in case of disagreement, the court shall fix the terms
thereof.
 According to the provision, the landowner can choose between
appropriating the building by paying the proper indemnity for the
same, as provided for in Articles 546 and 548 of the Civil Code; or
obliging the builder to pay the price of the land, unless its value is
 considerably more than that of the structures, in which case the
builder in good faith shall pay reasonable rent.
Under the first option, Visminda may appropriate for herself
the building on the subject property after indemnifying Tuatis for
the necessary and useful expenses the latter incurred for said
building, as provided in Article 546 of the Civil Code. Until
Visminda appropriately indemnifies Tuatis for the building
constructed by the latter, Tuatis may retain possession of the
building and the subject property.
Under the second option, Visminda may choose not to
appropriate the building and, instead, oblige Tuatis to pay the
present or current fair value of the land.The P10,000.00 price of
the subject property, as stated in the Deed of Sale on
Installment executed in November 1989, shall no longer apply,
since Visminda will be obliging Tuatis to pay for the price of the
land in the exercise of Visminda’s rights under Article 448 of the
Civil Code, and not under the said Deed. Tuatis’ obligation will
then be statutory, and not contractual, arising only when
Visminda has chosen her option under Article 448 of the Civil
Code
 Still under the second option, if the present or current value of the
land, the subject property herein, turns out to be considerably
more than that of the building built thereon, Tuatis cannot be
obliged to pay for the subject property, but she must pay Visminda
reasonable rent for the same. Visminda and Tuatis must agree on
the terms of the lease; otherwise, the court will fix the terms.

 The raison d’etre for this provision has been enunciated thus:
Where the builder, planter or sower has acted in good faith, a
conflict of rights arises between the owners, and it becomes
necessary to protect the owner of the improvements without
causing injustice to the owner of the land. In view of the
impracticability of creating a state of forced co-ownership, the law
has provided a just solution by giving the owner of the land the
option to acquire the improvements after payment of the proper
indemnity, or to oblige the builder or planter to pay for the land and
the sower the proper rent. He cannot refuse to exercise either
option. It is the owner of the land who is authorized to exercise the
option, because his right is older, and because, by the principle of
accession, he is entitled to the ownership of the accessory thing.
 Visminda’s Motion for Issuance of Writ of Execution cannot be
deemed as an expression of her choice to recover possession of
the subject property under the first option, since the options under
Article 448 of the Civil Code and their respective consequences
were also not clearly presented to her by the 19 April 1999
Decision of the RTC. She must then be given the opportunity to
make a choice between the options available to her after being
duly informed herein of her rights and obligations under both.